The WTO: What you need to know and why it matters for the future of global trade
What other threats exist?The ongoing trade war between the US and China is adding yet more pressure on the WTO. Both sides have put huge tariffs in place, which have so far have reduced trade between the nations by 11%. It should be the responsibility of the WTO to contain such trade disputes, but at this point, it seems it is as much of a powerless bystander as everyone else.
And it’s not just the US that is calling for reform. Other nations have been airing concerns that the WTO is failing to reach new agreements or hold nations to account. For example, some have challenged China’s inclusion in the WTO since, as a non-market economy, it represents exactly the kind of state involvement in market competition that the WTO should be working to iron out.
The EU, meanwhile, is already discussing potential reforms to the WTO in an effort to pacify US concerns. It remains a waiting game as to whether the talks will produce results.
Planning for the futureAs with so many global institutions in today’s changing geopolitical climate, the WTO has an uncertain future. Whatever happens, the impact on global trade – and by extension, the currency market – could be significant.
Don’t hesitate to contact OFX to discuss how you can protect your business from any currency volatility arising from the WTO’s uncertain future and its impact on global trade.